Ep.17: Why Is Israel Called the Second Silicon Valley?


If anywhere, the big data analysis revolution in medicine, combining genomic, microbiomic, clinical and other patient data, will start in Israel.

Here, innovation runs on steroids. Serial entrepreneurship is the norm, fuelled by military service discipline, high population education and the culture that encourages the pursuit of dreams even if this means you have to fail before you find a successful, meaningful product.

As explained by Levi Shapiro, the organiser of mHealth Israel conference, one of the things driving innovation is easily accessible seed capital in the country. Israel has good educational, cultural and business ties with the USA which is the primary market for most companies.

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In this episode:

  • What drives success in digital health in Israel?

  • How does Israel differ from other countries regarding interoperability?

  • What is the national strategy for digital health?

  • How does the Department of Digital Health inside the ministry of health work?

  • Which data can be seen by the government and by the patients?

  • What challenges are digital health startups in Israel facing?

  • How is Sheba Medical Center collaborating with innovators to drive scientific and technological progress?


Levi Shapiro, entrepreneur, investor and the organizer of the mHealth Israel conference (Foto Credit: mHealth Israel) and Eyal Zimlichan, Deputy General Director and Chief Medical Officer of the Sheba Medical Center.

Digital Health is taken seriously on the national level. A specialized Department for Digital Health operates inside the Ministry of Health, connected to other departments inside the government.

Apart from clear policy and financial incentives for the digital health ecosystem, Ministry of Health is currently working on a national precision medicine initiative. The aim is to leverage from a well developed IT infrastructure and rich medical data repositories and advance scientific progress by artificial intelligence, and machine learning fuelled data analysis.


Director of Digital Health Department at Israeli Ministry of Health Ronny Shapiro and Head of the same department Shira Lev-Ami. (Foto Credit: mHealth Israel)

Innovation centre inside Sheba Medical Centre

One of the prominent medical hubs for innovation is the Sheba Medical Centre. It includes 2.000 hospital beds, a gas station, two shopping malls, four hotels and employs 8.000 people. 1.5 million patients are treated each year, which is approximately 18% of the population in Israel.

A successful hospital business model

The center is the only hospital in Israel making profits each year by different revenue streams apart from clinical care. One is international work, medical tourism, consulting training courses, etc. for medical experts, so far mostly from former Soviet Union countries, China, Africa. Four years ago the medical center won the City of Moscow tender for the training of all the medical executives from the city.

The second revenue stream comes from investments in innovation. An exit of a startup company co-created by Sheba happens every few years, and since the Medical Centre can’t have equity in the companies, contracts run on receiving money from the exits and royalties afterward. Last year 75 million came in from a molecule sold to Merck (cCAM).

The current primary focus of the Medical Centre development is investing in innovation.

· Success is not measured in money profits but the number of startups attracted to the center and volume of innovation.

· Contracts have been redefined, going from 16 to two pages and changing the finalizing process from six months to four weeks.

· The new principle is to collaborate with other medical centers instead of competing with them. A relationship has already been established with institutions such as Massachusetts General Hospital, Mount Sinai New York, Mayo Clinic, Stanford, and others.

6 floors for rapid innovation

One of the last exciting projects the institution is executing is a new innovation center with 70.000 square feet has a very detailed structure

Eyal Zimlichman, Deputy General Director and Chief Medical Officer of the Sheba Medical Center.


Eyal Zimlichman, Deputy General Director and Chief Medical Officer of the Sheba Medical Center.

A new six-storey innovation center is being built in the old paper medical charts archive building. Sheba has been paperless since 2004, with a complete EMR since 2002, says Eyal Zimlichman. Because medical records have to be stored for 20 years, the paper is going to be transferred in storage outside the hospital and the empty space used for the innovation center.

The 1st floor will cater innovations coming from inside the hospital. Chosen projects will have eight months for proof of concept, with a 50.000 dollars grant. After eight months the result will be reevaluated, and then the project will either be developed further or the innovators would get on another project, so they don’t get discouraged from innovating.

The 2nd floor of the building will be open for startups coming from outside. A lot of startups only need access to data, patients, and clinicians to prove their concepts and they can get that in Sheba, especially since 100% EHRs have been established on a national level. Sheba offers them medical due diligence. Startups in the innovation center get a project manager who helps them get in contact with an expert from the hospital needed, which enables fast communication and development.

The 3rd floor of the building is for strategic partners, such as big corporations — potential investors in solutions, will have their space. All this enables the establishment of vertical hubs addressing and connecting different care aspects that could otherwise potentially be siloed — telemedicine, VR, digital imaging, perhaps cybersecurity as well, smart homes, etc.

The 4th floor is the academic floor. This is where alongside with experts from Israeli universities, students taking part in an international global MBA program with a specific focus on healthcare innovation will be educated. This program is provided in partnership with the ICD college in Herzelia, the leading business school in Israel.

All this creates an ecosystem enabling all floors to collaborate efficiently, according to the need. At the moment, the 5th and 6th level are empty, looking for more partners to move in.

The construction of the innovation center is expected to be finished by October 2018.

In the 17th episode of Medicine Today on Digital Health Levi Shapiro talks about how digital health landscape is changing, Ronny Shapiro and Shira Lev-Ami speak about the strategy of Ministry of Health in the digital health sphere and how multidisciplinary teams collaborate through 85 WhatsApp groups. Eyal Zimlichman explains what a patient experience in a paperless hospital looks like. The rehabilitation at Sheba Medical Center is driven by the VR simulation center inside the hospital followed by a telerehabilitation and tele-cardiac programs.

You can find, listen and subscribe to the podcast in iTunes or Podbean, or use the RSS feed. Suggestions, comments will be highly appreciated either here or onTwitter.